In a significant shake-up, Microsoft has announced the layoff of approximately 9,000 employees, accounting for nearly 4% of its global workforce, with a substantial impact on its Xbox division and associated gaming studios. This marks the fourth major round of layoffs for the tech giant within the past 18 months.
Xbox Studios Hit Hard
While Microsoft did not disclose the exact number of job cuts within the Xbox segment, industry insiders suggest that the layoffs are widespread and impactful, affecting several key development teams and projects.
Among the casualties of the restructuring are three high-profile video games, all of which have now been officially cancelled.
Games Cancelled:
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Perfect Dark (Reboot)
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Studio: The Initiative (now closed)
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Status: Cancelled
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A reboot of the iconic first-person shooter franchise, Perfect Dark, had been under development since 2018. The project was being led by The Initiative, a studio Microsoft founded with high ambitions. Its closure signifies a major setback in Xbox’s exclusive game lineup.
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Everwild
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Studio: Rare
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Status: Cancelled
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Under development for over a decade, Everwild was a much-anticipated title from Rare, creators of Sea of Thieves, Banjo-Kazooie, and GoldenEye 007. Despite its lengthy development cycle, the game has now been shelved as part of broader cuts.
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Blackbird (Codename)
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Studio: ZeniMax Online Studios
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Status: Cancelled
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ZeniMax, the developer behind Elder Scrolls Online, was working on an unannounced MMORPG codenamed Blackbird. This project, too, has been discontinued amid the layoffs.
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In an internal email, Matt Booty, Head of Xbox Game Studios, confirmed the decisions, stating, “We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative.”
Studios Affected
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The Initiative: Now shuttered, the studio was envisioned as a high-caliber team focused on premium Xbox exclusives.
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Rare: Though still operational, Rare faces a significant setback with the cancellation of Everwild.
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ZeniMax Online Studios: Facing resource reduction and game cancellations.
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Halo Studios: According to sources, at least five developers have been laid off.
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Turn 10 Studios (Forza Horizon): Reportedly laid off over 70 employees.
Industry Reactions
This wave of layoffs and cancellations has sparked concern across the gaming industry, especially among Xbox fans who were anticipating new titles. With studios like Rare and ZeniMax now losing major projects, Microsoft’s vision for first-party exclusives under Xbox Game Studios appears to be undergoing a radical shift.
Broader Implications
Microsoft’s gaming division had about 20,000 employees as of January 2024. The recent cuts indicate a strategic re-evaluation of game development priorities, possibly to consolidate resources around fewer, higher-impact titles in an increasingly competitive gaming market.
This move also follows Microsoft’s ongoing efforts to streamline its operations following high-profile acquisitions in recent years, including its blockbuster $68.7 billion purchase of Activision Blizzard.
